MUB Premium To NAV Highest Since Early 2009

Now that the $25 million AUM Egypt ETF is expected to be indicative of the entire Egyptian stock market, and which will likely be claimed to be correct even if its underlying securities never manage to trade up to parity, when and if it reopens, there is little that can surprise us anymore. With that in mind, we would like to present the MUB ETF, whose recent surge has left it trading at a premium to NAV that has not been seen since just before the March 2009 666 lows. As the chart below shows, the last time the MUB was trading at 100.79, it did so at a record discount to NAV. Now - about three months later, it is the inverse, as the municipal tracker has now inverted and is trading at a multi-year premium. This begs the question: does underlying value chase the synthetic price? And if so, does it mean that it is time for a compression trade in which the MCDX is sold coupled with selling of the MUB in anticipation of a return to parity spread. That would be the case in a normal world. In this one, in which the WTI-Brent spread just hit another fresh all time wide, who knows...